GREAT HOUSING PLAN

Press, Volume LXXI, Issue 21377, 21 January 1935, Page 17

GREAT HOUSING PLAN

American Decision ATTEMPT TO INCREASE EMPLOYMENT . NEW YORK, December 10. A series of conferences at the "Little White House" in Georgia have resulted in a Presidential decision to refocus the post-election recovery movement by asking Congress to authorise a housing scheme for America. Reliance would be placed upon private enterprise in the financing and building of homes for the middle classes, For the poor, the Government would enter the field itself with a plan which would include provision for slum" clearance and rehousing. Housing has riveted attention because unemployment is most marked in the construction industry, Of almost 11,000,000 unemployed, ,an increase of more than 500,000 in 12 months, the greatest proportion is recorded by the building trades. Seven million workers are more or less directly dependent upon such work, and those without jobs number as high as 90 per cent.

Another measure of the persistent depression in this industry is obtainable from a comparison of building contracts. In the three years ended 1928 they averaged £600,000,000. In 1932 they had fallen to £45,000,000 and last year to £42,000,000. This year they will not reach £40,000,000. The , New Deal has not. made the slightest impression upon this vital enterprise. Costs Too High The reason for this state of things is not far to seek. Costs are too high for the average American purse. Housing demand is as plentiful as it was in Britain, but the union scale of building wages is out of line with other income scales. An official put the matter yesterday in this way, "You cannot expect a worker earning 2s 6d an hour to hire a worker earning 6s 9d." Far from mitigating the difficulty, the New Deal has actually added to it. The cartellism embodied m the N.R.A. codes has been responsible for very sharp increases in the prices of all building materials. Coupled with building wages, they are almost back at the 1929 level, while the national income is still 43 per cent, below it. Financing is also relatively dear and scarce. Thus the new phase of the American recovery movement is based on a concentration on equitable price relationships as a first principle.. This principle has always been implicit in the Roosevelt programme, but hitherto it has been overlaid. A year ago, for instance, the Recovery Administration tried unsuccessfully to reduce building wages. The effort was kept secret because i* would have been regarded as inconsistent with the price-raising and wage-expanding campaign of the initial New Deal. Experience Teaches Exoerience, however, finds an avid student in the White House. The President is held to be supporting the Public Works Administrator, Mr Harold L. Ickes, in a public appeal for voluntary wage cuts If the building workers will accept a lower hourly rate, he says, the greater demand for their work will increase their annual income, ine trade unions are outwardly,sympathetic. But they growing increasingly cool towards the Adminr Kiom In this instance, tog are asking for some evidence that .the construction suppliers will also cut their protected prices. Mr Ickes may bring both sides round a table for simultaneous action. .„„*.,, He is one of the leading "Leftists of the Administration. This is me description applied to official? and legislators who believe that public expenditures cannot be tapered ott, as well as to those who hold radical doctrines. Several days ago he handed the President an ambitious plan for the rehousing of America with fresh billions of Federal money lendable to the public at 3 per cent.. The scheme caused a fluttering \m business circles and provoked the charge that it would tend to violate an implied understanding of a business test period during which private enterprise would try to lay the foundations of recovery.

Mortgage Insurances The administration champion of this standpoint is Mr James A. Moffett, the Federal Housing Administrator. Mr Moffett, an old Standard Oil executive, is engaged in encouraging private enterprise by put. ting Government credit behind private investment. His agency is authorised to insure bank loans for small repairs and new mortgages on residential property. Believing fervently that business will begin its upward march if Government assistance is restricted to encouragement, he has been at odds with his colleague at the Public Works Administration. Both of them have quoted from British experiences in support of their theses. The President has decided to take a middle course in his request for new legislation. With Mr- Moffett he is still an enthusiast for the present agencies for reviving private initiative. He may be expected to use his influence to bring costs more in line with incomes in support of

I such a revival; So far bis contribution has been to insist that no newmortgage shall be insured which bears interest higher than 5 per cent. At the same time Mr Roosevelt fresh from his visit to model communities in the Tennessee Valley, has expressed his concern for the rehousing of those "under-privi-leged" (a word which has taken the place of the Forgotten Man and the Average Man in the Presidential vocabulary), who do not have access to lending sources. His "solution of the Ickes-Moffett quarrel is to draw a clear line between the fields for private and public enterprise. By limiting Government help to the under-privileged he has assuaged the claims of Mr Moffett and restored harmony in his official family.